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The Gist
A daily dose of market updates and smart investment strategies to guide your portfolio decisions
Today's Report
Your Morning Fix
- Economic managers expect strong economic and investment ties between the Philippines and the US to continue despite tariff threats from the Trump administration. Among the topics they discussed recently is the CREATE MORE Act to boost economic opportunities.
- US Federal Reserve officials expressed concerns that Trump’s initial policies, particularly on tariffs, could drive inflation higher, with businesses planning to pass on costs to consumers. They said trade policy and supply chain disruptions could slow disinflation and raise inflation expectations.
- The BIR’s Tax Compliance Verification Drive reached over 200,000 establishments nationwide, revealing that 12% were unregistered. Commissioner Romeo D. Lumagui Jr. emphasized the agency’s shift toward a taxpayer-centric approach, using the findings to improve business registration compliance.
- Approved building permits fell 10.8% in December, reversing the 1% growth from the previous year, according to preliminary PSA data. The number of projects, total floor area, and construction value all declined.
- Philippine vehicle sales rose 10.4% year-on-year to 37,604 units in January, according to the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and Truck Manufacturers Association (TMA). While passenger car sales dropped 8.5%, commercial vehicle sales surged 16.6%, dominating the market at 79.5% of total sales.
Our Portfolio Recommendation
For the peso portfolio, we recommend a neutral 50-50 split between fixed income and equities. While the Bangko Sentral ng Pilipinas and US Fed rate cuts support risk assets, potential headwinds from tariffs and market volatility may call for a balanced approach to capture fixed income gains while maintaining equity exposure. In the dollar portfolio, we maintain an overweight stance on equities at 55% versus 45% in fixed income, driven by US market strength and robust corporate earnings. Though Fed rate cuts are anticipated, we remain cautious of tariff impacts and stagflation risks, balancing equity upside potential with fixed income stability.
| 2025 Metrobank Forecast | 2026 Metrobank Forecast | 2027-2029 Metrobank Forecast | |
|---|---|---|---|
| GDP | 5.8% | 6.2% | 6.0% |
| Inflation | 3.4% | 3.0% | 3.0% |
| BSP Target Reverse Repurchase Rate | 5.25% | 4.50% | 5.00% |
| Federal Funds Rate | 4.00% | 3.25% | 4.00% |
| USD/PHP | 57.9 | 56.5 | 55.0 |
CHART OF THE DAY
Chart of the Day
Japan's core inflation surges to 19-month high
Japan’s core consumer price index (CPI), excluding fresh food prices, surged by 3.2% in January 2025 compared to the previous year, reaching a 19-month high. This exceeded market expectations of a 3.1% increase and followed a 3.0% rise in December. Inflation has remained above the Bank of Japan’s (BOJ) 2% target for nearly three years, leading to expectations of continued interest rate hikes. Additionally, a separate index excluding both fresh food and fuel costs rose by 2.5%, marking its fastest year-on-year pace since March 2024. Sources: Bloomberg, Reuters
Featured Reports
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USD/PHP closes within the 57-handle
- The USD/PHP exchange rate opened 5.5 centavos lower at 58.03 before quickly testing the 57.95-support level as risky sentiment permeated the market overnight.
- US President Donald Trump headlines on a possible new trade deal with China sent the dollar-yuan plummeting, with the local pair tracking a bit of this drop.
- Importers scaling in below the 58-handle provided enough support to return the pair back towards 58.00.
- The USD/PHP exchange rate ultimately closed at 57.94, or 14.8 centavos lower day-on-day.
- The current support levels of USD/PHP are at 57.70/80 while the resistance levels are at 58.00/15.
READ MORE
Local GS sees strong buying in the belly
- The local government securities (GS) market saw players buying 3- to 10-Year bonds, tracking the overnight decline in global yields.
- Retail investors were active in the front-end of the curve, while institutional players stayed on the sidelines.
- The 4-Year Retail Treasury Bond 5-18 led trading activity around the 5.90% level, while the 7-Year Fixed Rate Treasury Note (FXTN) 10-69 outperformed, closing at 6.01%.
- Overall, benchmark yields closed 1 to 4 basis points bps lower day-on-day, with stronger buying in the belly of the curve.
- The Bureau of the Treasury will reissue FXTN 20-27 for next week’s 20-Year auction.
READ MORE
PSEi dips amid heightened global concerns
- The Philippine Stock Exchange index (PSEi) ended 53.25 points lower at 6,066.63 as most investors stayed defensive and merely locked-in gains.
- Nearly all sectors ended lower, with Property (-2.56%) leading the decline, weighed down by broad-based position trimming.
- Puregold Price Club Inc. (+3.02%), Jollibee Foods Corporation (+2.30%), and JG Summit Holdings Inc. (+1.74%) emerged as top gainers.
- Meanwhile, Ayala Land Inc. (-8.06%), Monde Nissin Corp. (-6.18%), and Alliance Global Group Inc. (-4.69%) posted the steepest losses.
- The local stock market struggled to find direction as regional peers also saw weakness, reflecting heightened volatility on escalating geopolitical tensions and lingering concerns over global trade policies.
READ MORE
USD/PHP closes within the 57-handle
- The USD/PHP exchange rate opened 5.5 centavos lower at 58.03 before quickly testing the 57.95-support level as risky sentiment permeated the market overnight.
- US President Donald Trump headlines on a possible new trade deal with China sent the dollar-yuan plummeting, with the local pair tracking a bit of this drop.
- Importers scaling in below the 58-handle provided enough support to return the pair back towards 58.00.
- The USD/PHP exchange rate ultimately closed at 57.94, or 14.8 centavos lower day-on-day.
- The current support levels of USD/PHP are at 57.70/80 while the resistance levels are at 58.00/15.
READ MORE
Local GS sees strong buying in the belly
- The local government securities (GS) market saw players buying 3- to 10-Year bonds, tracking the overnight decline in global yields.
- Retail investors were active in the front-end of the curve, while institutional players stayed on the sidelines.
- The 4-Year Retail Treasury Bond 5-18 led trading activity around the 5.90% level, while the 7-Year Fixed Rate Treasury Note (FXTN) 10-69 outperformed, closing at 6.01%.
- Overall, benchmark yields closed 1 to 4 basis points bps lower day-on-day, with stronger buying in the belly of the curve.
- The Bureau of the Treasury will reissue FXTN 20-27 for next week’s 20-Year auction.
READ MORE
PSEi dips amid heightened global concerns
- The Philippine Stock Exchange index (PSEi) ended 53.25 points lower at 6,066.63 as most investors stayed defensive and merely locked-in gains.
- Nearly all sectors ended lower, with Property (-2.56%) leading the decline, weighed down by broad-based position trimming.
- Puregold Price Club Inc. (+3.02%), Jollibee Foods Corporation (+2.30%), and JG Summit Holdings Inc. (+1.74%) emerged as top gainers.
- Meanwhile, Ayala Land Inc. (-8.06%), Monde Nissin Corp. (-6.18%), and Alliance Global Group Inc. (-4.69%) posted the steepest losses.
- The local stock market struggled to find direction as regional peers also saw weakness, reflecting heightened volatility on escalating geopolitical tensions and lingering concerns over global trade policies.
READ MORE